English


ON ENERGY ACCESS IN SUB-SAHARAN AFRICA
TRANSFORMING SUB-SAHARAN AFRICA: ENERGY INVESTMENT OPPORTUNITIES
Jamal Saghir
Senior Regional Advisor
Africa Region
Abidjan November 16 2015
OUTLINE
▪ Addressing development challenges in the presence of vast
unharnessed energy resource potential in SSA
▪ Transforming SSA: high-impact investment opportunities for public
private partnerships
▪ Some opportunities going forward
AFRICA’S ENERGY DEVELOPMENT CHALLENGE
Increased energy access leads to economic growth, poverty reduction, and shared prosperity
➢ 600 million people and 10 million SMEs have no access in
Africa
➢ Energy growth is not keeping pace with GDP growth
❑
Access to modern energy services
linked to each of the MDGs
❑
Source: EU and World Bank Estimates
3
Access to energy consumption enables
economic growth
WHAT NEXT TO ENSURE AFFORDABLE, RELIABLE, AND SUSTAINABLE
ENERGY SERVICES?
▪ Increased focus on generation using public and private sector
investments
•
•
•
Hydropower in Guinea, Senegal, Mali, Liberia, Sierra Leone, Cote d’Ivoire,
Cameroon, Ethiopia, DRC, etc
Gas along coast from Cote d’Ivoire to Nigeria, Kenya, Mozambique,
Tanzania, Uganda
Major scale up of Solar, Wind, Geothermal
▪ From installing hardware to facilitating power trade
▪ Constructing the missing links in the regional grid and deploying off grid
solutions
▪ Scale up and speed up implementation of all forms of renewable
energies
▪ Reform energy utilities and ensure distribution companies are viable
Presentation Title
AFRICA’S ENERGY RESOURCE POTENTIAL
❑
Abundance of low carbon, low cost energy development resources
❑ 45 GW of feasible Hydropower - One of Africa’s most promising drivers for green growth
❑ Major reserves of Natural Gas - West: Nigeria, Gulf of Guinea, East: Mozambique, Tanzania
❑ 15 GW of Geothermal potential - African Rift Valley
❑ Over 1,000 GW of Wind and Solar - Needs to be economically dispatched with attentive siting and infrastructure
▪
▪
▪
▪
5
Source: Africa Energy Outlook and World Bank Estimates
Over 1,000 GW
of Wind and
Solar
45 GW of
feasible
Hydropower
15 GW of
Geothermal
potential
Major reserves
of Natural Gas
GREATER INVESTMENT NEEDED TO HARNESS RESOURCE POTENTIAL:
ELECTRICITY SUPPLY GAP
Africa needs to add 6-7 GW of installed capacity annually for universal access by 2030
BUT
❑
Currently, about 1-2 GW of new installed capacity deployed a year.
❑
Access growing no more than 1% per year in the last decade
❑
At this rate, less than 60% of Africans will have electricity in their homes by 2030
Regional Energy Need
Energy
shortfall of
80%
6
GREATER INVESTMENT NEEDED TO HARNESS RESOURCE POTENTIAL:
INVESTMENT GAP
Africa needs up to $40-50 billion yearly for universal access by 2030
BUT
❑
Currently, $9-10 billion invested yearly to provide first access to modern energy
Investment Needed
African
Power Pool
Regions
7
Current Investment Trend
Avg. Yearly
Investment ($B)
Cumulative
Till 2020 ($B)
Avg. Yearly
Investment ($B)
Cumulative
Till 2020 ($B)
CAPP
6.5
52.0
World Bank
1.5
12.0
EAPP
14.5
116.0
Other Multilaterals
1.5
12.0
SAPP
18.5
148.0
Emerging financiers
2.0
15.0
WAPP
10.5
84.0
50.0
400.0
Private sector
5.0
41.0
Total
10.0
80.0
Financing
shortfall of
80%
Financiers
Total
UNTAPPED POTENTIAL FOR PRIVATE SECTOR INVESTMENT
❑
Private sector investments in energy in Africa is 1% of all such investments in developing regions (vs.
34% for South Asia, 26% for LAC, or 25% for ECA)
❑
Six SSA countries concentrate 80% of these investments*
❑
Leveraging private sector partnerships with innovative mechanisms/increased focus on instruments such
as PRGs critical
8
* Nigeria, Uganda, Cameroon, Ghana, Kenya, and Tanzania. Source: PPI database
INCREASING GENERATION WILL REQUIRE CROWDING IN PRIVATE MONEY
Current challenges
▪ Private sector investments in
energy in Africa is 1% of private
investments in developing
regions (vs. 34% for South Asia,
26% for LAC, or 25% for ECA)
▪ Six SSA countries concentrate
80% of private investments
▪
Private sector is not
systematically engaged
Mainly through IPPs : total $6B
investments in 5 GW of installed
capacity
Basel III implementation is increasing
the cost of long-term funding
Solutions
▪
Integrated system planning for
Fuel to Power value chain;
▪ Prepare bankable deals
▪ Contract standardization/one
stop shop to obtain cost
reduction
▪ Select professional developers
and drive down cost through
competitive tenders
▪
Improve creditworthiness of the
power sector
LEVERAGING PARTNERSHIPS TO SCALE UP INVESTMENTS
Significantly increasing investment: a challenge but also opportunity to leverage partnerships
•
10
Limited public resources can be
utilized to reduce investment risk and
promote growth
OUTLINE
▪ Addressing development challenges in the presence of vast
unharnessed energy resource potential in SSA
▪ Transforming SSA: high-impact investment opportunities for public
private partnerships
▪ Some opportunities going forward
OPPORTUNITIES FOR TRANSFORMATIVE IMPACT
Mauritania
- Banda Gas to Power
World Bank Group is actively engaged in investment in large-scale
high impact projects supporting renewables (including large
hydro), narural gas and facilitating electricity trade
Guniea
- Kaleta Hydropower
Ghana
- Sankofa Gas Field Development
- Priority IPP program (Gas)
Cote d’Ivoire
- Import and regasification of LNG
Nigeria
- Azura-Edo IPP
- Elelctricity sector reform and investments
West Africa Power Pool (WAPP)
East Africa Power Pool (EAPP)
Ethiopia
- Geothermal Sector Development
Uganda
- PRG for Renewable Energy Development
Tanzania
- Gas to power
Mozambique
- Regional Transmission Development
Program
Zambia:
- Batoka Gorge Hydro
- Hydropower development project
- Scaling-up Solar
Southern Africa Power Pool
(SAPP)
12
Clean energy resource development includes linking supply to demand – regional perspective
OUTLINE
▪ Addressing development challenges in the presence of vast
unharnessed energy resource potential in SSA
▪ Transforming SSA: high-impact investment opportunities for public
private partnerships
▪ Some opportunities going forward
OPPORTUNITY 1: LEVERAGING THE MINING SECTOR AS ANCHOR OFFTAKER
▪ Mining
sector is poised for substantial growth requiring
substantial amounts of energy;
▪ It
can be an anchor power customer enabling generation
projects to become viable;
▪ World
Bank can help governments ensure equitable benefit
sharing between industry and households, while IFC brings
structuring expertise in mining-related power transactions.
▪ Engagements
to leverage mining demand for power
generation projects are underway but are in early stages
▪
Inga-3 BC (DRC), Banda (Mauritania), Souapiti (Guinea), Hummingbird
(Liberia)
Iron ore clusters of West & Central Africa
> 420 mtpa total potential
production
> 170 mtpa
total
potential
production
OPPORTUNITY 2: SCALING UP SOLAR
▪ Several WBG instruments brought together under a single product offering;
▪ Client governments would engage in a single mandate to access the “one-stop-shop”;
▪ Stapled financing in bidding documents reduces costs and time to come to financial closure.
1
Gov signs a mandate
with IFC advisory
• Gov & WBG agree on
the MW’s to be
tendered
•
• Gov & WBG agree on
Steps/Timing
•
• Gov & IFC agree on
Fee
5
4
3
2
IFC adv offers advice
to prepare tender and
ensures speed and
quality
IFC advisory runs
competitive tender
with tier 1 developers
• Advice on location & size
of PV plants in your grid
•
• Advice on local/legal
regulatory environment
•
• Standardized balanced
but bankable project
documents (PPA,
Interconnection…), that
ensure speed
• Simple, standardized but
competitive tender
process
•
• Qualified and preapproved tier 1 private
sector developers
ensuring strong
competition
•
• Min aggregate project/
bid size 25MW
WBG finances
winners based on
pre-agreed terms
• Pre-approved
competitive financing
offered to all bidders
•
• Blended concessional
finance where
appropriate
•
• Tenors up to 20 years
•
• Pre-approved credit
enhancement products
available if required
2 year delivery from Mandate to operations
Winning bids
construct and operate
plants within 6-12
months
• 6 months after being
selected, winning bids
should reach financial
close and start
construction
•
• Within 6-12 months
projects should be
operational
OPPORTUNITY 3: REGIONAL PROJECTS – THE “FINAL FRONTIER”
▪
Among the cheapest indigenous energy sources in Africa are gas, hydropower and solar;
▪
Large generation projects with offtake in multiple countries are the “final frontier” for Public
Private Partnerships;
▪
We are exploring this frontier, but we are on a steep learning curve:
Using lessons learned from Bank Group engagement in regional public projects à “sectoral
diplomacy”;
Private sector participation in cross-border projects requires additional project structuring skills;
Smarter combining public and private financing from the start (instead of ‘retrofitting’);
Early experience shows how challenging this is (Banda, etc).
▪
Doing more of these projects quicker and better requires us to have focused and
sustained resources
THANK YOU
worldbank.org/africa
worldbank.org/energy
ANNEX
PROJECT PROFILE
18
Presentation Title
EAST AFRICA POWER POOL
19
Presentation Title
GEOTHERMAL SECTOR DEVELOPMENT PROJECT
(ETHIOPIA)
Overview
• Estimated installed capacity: 70+ MW
• Estimated cost: US$ 220 million
• Phase 1: Confirm the geothermal resources and support the Government in establishing its institutional
framework for geothermal development using World Bank concessional financing
• Phase 2: 1st geothermal site developed through public finance: government contribution + concessional
financing from development partners
• 2nd geothermal site developed as PPP: with upstream reconnaissance, exploration and test drilling supported
through public (concessional) financing + competitivel bidding to attract private financing in production field
development and power plant construction
Benefits to Governments and Utilities
Projected Timeline
• Improved country’s electricity generation mix;
• strengthening the Government’s agenda to expand access through increase in base load
electricity generation potential and reliability of supply;
• Facilitated export to neighboring countries;
• Improved capacity of EEP; and strengthened institutional, legal and regulatory framework to
attract private capital to geothermal development;
• Eventual transfer of cost savings from policy and business environment improvements to
electricity consumers through a competitive tariff.
SINGIDA WIND PROJECT
(TANZANIA)
Overview
• Estimated installed capacity: 100 MW
• Estimated cost: US$280 million
• Structuring: IPP with private financing, no concessional financing foreseen
• Expected to be the first operating wind IPP in Tanzania
• Part of a series of wind farm projects situated east of Singida, Northern Tanzania, approximately 700 km from Dar-es-Salaam.
• Will benefit from the close proximity (about 11 kilometers) to the prospective high voltage (400 kV) transmission infrastructure, to
be commissioned in March 2016.
• An international private sector developer has been developing the project with a local partner.
• IFC has taken an equity stake in the project. WB requested to provide guarantees to cover the risks of the national electric utility,
Benefits to Governments and Utilities
Projected Timeline
• Increase generation capacity for the existing and new consumers, thus
supporting expanding access;
• Supporting the Government in its goal to increase share of wind generation
capacity in country’s fuel mix
• Complementary to the existing hydropower generation as the windiest months
typically fall during the dry season.
• Stable wind energy tariff over the years (as no fuel source is required which
could cause fluctuations in the tariffs); in the longer term wind energy is likely
to become cheaper.
Photo: Dana Smillie / World Bank
GAS-FIRED POWER PLANT PROJECT
(TANZANIA)
Overview
• Estimated installed capacity: 250 MW
• Estimated cost: US$250 million
• Structuring: PPP/ IPP
• The Government has developed a gas-to-power program, which includes investments in the gas producing fields, gas transport
infrastructure, and power plants.
• The Government is looking for private investors to develop a gas-fired power plant of about 250 MW, under a long-term power
purchase agreement with TANESCO.
• TANESCO has hired a transaction advisor, financed from an IDA Credit, to help structure the transaction and identify investors.
Benefits to Governments and Utilities
• Increase generation capacity for the existing and new consumers, thus
supporting expanding access;
• Attract private investment in the power sector, reducing pressure on public
financing and electricity tariffs;
• Mitigate the variability of hydropower and the risk of electricity shortages
during the “dry periods” in a cost-effective manner.
Projected Timeline
PARTIAL RISK GUARANTEE FOR RENEWABLE ENERGY DEVELOPMENT (UGANDA)
Overview
• Estimated installed capacity: 200 MW
• Estimated cost: US$ 160 million
• Structuring: Partial Risk Guarantee to support IPP financing
• GoU’s GET FiT program intends to fast-track about 20 small-scale renewable energy generation projects, promoted by private
developers to transform Uganda’s energy mix within a period of 3-5 years.
• Series of WB (IDA) Guarantees harnesses renewable energy resources, including small hydro, solar and wind by promoting small
private power producers (SPPPs) by complimenting GET FiT.
• Reduced cost of financing for the developers with partial risk guarantee support
Photo: Raihan Elahi / World Bank
Benefits to Governments and Utilities
Current status and next step
• Attract more private investment to develop Uganda’s renewable energy
resources;
• The Project is at implementation stage.
• Help the Government to maintain current level of Feed in Tariff;
• Quick signing of contracts, with use of standard Power Purchase Agreement
and Implementation Agreement.
• About 5 small hydro projects and 2 small solar PV projects have signed PPA
and IA. (Projects received financing from DFIs and did not require Bank
supported PRG).
• Muvumbe hydro power project (6.5 MW) is raising funds from conventional
banks and have requested support from PRG to reduce its cost of financing.
• WB is closely working with Muvumbe to offer PRG support to this project.
• Muvumbe PRG is expected to become operational in 2016.
SOUTHERN AFRICA POWER POOL
24
Presentation Title
BATOKA GORGE HYDRO POWER PROJECT (ZAMBIA)
Overview
• Estimated installed capacity: 1,600 – 2,400 MW
• Estimated cost: US$ 2 – 2.6 billion
• Structuring: TBD – PPP approach is under discussion
• The Project shall also entail construction of other infrastructure
such as power transmission lines, access roads and housing.
• Project ranks high as a least cost (unit cost of generation) option
for both Zambia and Zimbabwe.
Photo: World Bank
Benefits to Governments and Utilities
Projected Timeline
• Increased base-load generation capacity;
▪ Increased reliability of electricity supply in both countries
▪ Increased capacity to connect new consumers to the national
grids of the two countries, this supporting access expansion
agenda;
▪ Possibility to export electricity to wider Southern Africa region.
HYDROPOWER DEVELOPMENT
(ZAMBIA)
Overview
• Estimated installed capacity: ~500 MW
• Estimated cost: TBD
• Structuring: Technical Assistance and Guarantee to support IPPs
• Objective is to improve efficiency of Zambia’s procurement process to allow GoZ to award contracts to qualified
developers to construct hydropower plants following a transparent and competitive process
• World Bank may finance feasibility studies of selected hydropower plants and help the GoZ in following a
transparent and competitive procurement process to award contracts for up to 500 MW of hydro power plants.
• WB technical assistance to manage a procurement process
• WB may also provide risk enhancement options, upon Government’s request.
• Private sector entering the procurement process with assurance that bid evaluation will be carried out as per a
pre-determined timeline
Benefits to Governments and Utilities
Current status and next step
• Discussion between the Government and the World Bank is ongoing.
• A transparent and competitive procurement process to select qualified
developers;
• Preparing bidding documents based on findings of a feasibility study to reduce
development risk;
• Speedy contract award after bid evaluation.
• Preparation of a Technical Assistance project would commence upon receiving
a formal request from the Government of Zambia by the World Bank.
GUARANTEE FOR UTILITY SCALE SOLAR
(ZAMBIA)
Overview
• Estimated installed capacity: 300 MW
• Estimated cost: US$ 60 million as guarantee
• Structuring: World Bank Guarantee to promote PPP approach
• Private sector sponsors will be selected following open and transparent procurement process, to set up solar PV
power plants of 50 MW size each, at different locations
• Government of Zambia has signed a Financial and Advisory Services Agreement with IFC.
• IFC will act as the Government’s Transaction Advisor to manage a procurement process for the first two 50 MW
solar PV power plants.
• Standardized bidding document developed by WBG’s Scaling Solar initiative, along with a model Power Purchase
Agreement will be used.
• World Bank will provide a Guarantee to reduce payment risks of the electricity purchaser (ZESCO) from up to 300
MW of solar PV power plants, with private sector investment financing
Benefits to Governments and Utilities
Projected Timeline
• Ensuring predictability of the process through:
• a transparent and competitive procurement while awarding utility-scale solar
PV power plants;
• using standard contract documents to ensure efficiency;
• disallowing any negotiations on a Power Purchase Agreement;
• Complimenting large hydropower reservoirs with utility-scale solar PV plants, thus
increasing overall power supply reliability in Zambia and facilitating access
expansion.
REGIONAL TRANSMISSION DEVELOPMENT PROGRAM
(MOZAMBIQUE)
Overview
• Estimated transmission line: 1,400-km system (HVDC and HVAC)
• Facilitated installed capacity: 1,500MW Mphanda Nkuwa hydropower plant, 1,245MW expansion of Cahora Bassa hydropower
plant, 400MW gas-fired power plant at Temane
• Estimated cost: Over US$ 5 billion for integrated Program:
• US$ 2 billion transmission system, US$ 3 billion Mphanda Nkuwa hydropower plant, US$ 0.5 billion Temane gas-fired plant
• 2 phase structuring
• Expected Phase 1: - publicly funded AC line (0.5 billion), gas-fired power plant at Temane as a PPP (0.5 billion)
• Expected Phase 2: DC lines, financed with Mphanda Nkuwa hydropower project + significant financing from foreign and local
investor + significant financing from commercial banks
• Benefits to Governments and Utilities
AC line will significantly increase transmission coverage and enable access (currently estimated
at 25%);
• Unlock development of considerable power generation potential in renewables and lower-carbon
technologies;
• Enable economically important industrial activities (especially at Chibuto in expected Phase 1
area);
• DC line will increase regional trade, benefit regional utilities through access to sustainable
hydropower at competitive cost;
• Strengthen EdM’S finances and reduce pressure on domestic tariffs.
Projected Timeline
WEST AFRICA POWER POOL
29
Presentation Title
WE HAVE COME A LONG WAY….FROM LIMITED INTERCONNECTIVITY IN 2005
Existing interconnection
Mauritania
Senegal
Existing Hydro Plant
(before WAPP)
Niger
The Gambia
Mali
Burkina Faso
Guinea Bissau
Nigeria
Guinea
Benin
Togo
Sierra Leone
Cote d’Ivoire
Ghana
Existing Thermal Plant
Liberia
WE HAVE COME A LONG WAY….TO A SERIES OF SUB-REGIONAL GRIDS IN 2015
“Interzonal”
Burkina Faso –
Ghana
Transmission
Kandadji Hydro
(130MW)
Existing interconnection
Mauritania
New interconnection
(finance secured)
Senegal
Felou hydro plant
(130MW)
Existing Hydro Plant
(before WAPP)
Niger
The Gambia
Mali
Burkina Faso
Guinea Bissau
Nigeria
Kaleta hydro plant
(240MW)
Guinea
Benin
Togo
Sierra Leone
Cote d’Ivoire
Ghana
“CLSG”
transmission
Hydro plant under
construction (finance
secured)
Hydro plant under
construction (no WBG
involvement)
Mount Coffee
Hydro Plant
(60MW)
Existing Thermal Plant
(before WAPP)
New Thermal Plant/
Expansion
Gas fields under
development
Liberia
Foxtrot Gasfield Azito
CIPREL
expansion expansion
(139MW) (220 MW)
Takoradi Contour global
Chevron
expansion Lome (100
(110 MW)
MW) “Coastal Backbone” Gasfield
Transmission
but 31
little power in the lines because of generation deficits…
SANKOFA GAS FIELD DEVELOPMENT
(GHANA)
Overview
▪ $171 mmcfd of base-load supply for nearly 15 years sufficient to supply up to 1,000MW of power generation
▪ Sankofa will come on line in the first half of 2018 (production
at other Ghanaian gas fields isexpected to start declining in
2020)
▪ Sankofa non-associated gas fields is part of the OCTP block
together with separate oil field.
▪ OCTP Block will be developed Eni and Vitol Group together
with GNPC of Ghana.
▪ The total cost of over the lifetime of the OCTP (oil and gas) is
US$ 7.9 billion.
Risk and how they are mitigated
Project Impact
▪ Project offers large fiscal benefits to the Government in the
form of royalties and taxes from oil and gas sales
▪ Project will be a gamechanger for the power sector
▪ signification reduction of power generation cost
through fuel price savings
▪ Possibility to increase generation capacity
▪ Macro: Fiscal management risks at sovereign level
can spill over to energy sector
▪ Downstream Energy Sector risks: The time lag
between investment decision and First Gas (three
years from now) provides a time window to move
forward on improving efficiency and reestablishing the
financial equilibrium of the sector.
▪ Security structure (including cash waterfall of National
Oil & Gas company, Cash Collateral, and WBG
guarantees) reduces risks for GoG
PRIORITY IPP PROGRAM
(GHANA)
Overview
▪ Ghana has one of the highest access rates in West Africa
(70%) but still has a lot of suppressed demand
▪ Jubilee, Ten and Sankofa gas will come on line in 2016-2018
– availability of gas will unlock investments in the IPP program
▪ The Government of Ghana is engaging in a priority IPP
program with a cumulative installed capacity of 1,500 MW
▪ World Bank Group gearing up to provide support in terms of
financing and guarantees
Benefits to Governments and Utilities
▪ Increase access to sustainable and reliable energy
▪ Reduced reliance on expensive liquid fuel for power
generation
▪ Ensuring a gas offtaker for gas fields that will become
online in 2016-18 and that will bring important government
revenues
▪ Increase visibility of Ghana as destination for private
investment
IMPORT AND REGASIFICATION OF LNG
(COTE D’IVOIRE)
Overview
▪ Growing power demand in in Cote d’Ivoire and sub-region
▪ A recent World Bank study has confirmed that the import of
liquefied natural gas (LNG) via a Floating Storage and
Regasification Unit (FSRU) is a viable option for Cote d’Ivoire
▪ Estimated cost of terminal infrastructure up to US$ 180 million
▪ Complex negotiations with multiple public and private parties
key to a successful outcome
▪ Gas supplied can generate up to 3,000 MW of power
Benefits to Governments and Utilities
▪ Increase access to sustainable and reliable
energy;
▪ Energy Security for West Africa Power Pool;
▪ Allow Cote d’Ivoire to continue to export power to
neighboring countries and to become an energy
hub for the region;
▪ Opportunity of importing, storing and regasifying
liquefied natural gas (LNG) at lower cost;
▪ Diversification of the sources of supply in natural
gas for the country.
AZURA-EDO IPP (NIGERIA)
Overview
▪ $900 million project cost, 459 MW gas-fired IPP to be build in
Edo State Nigeria
▪ Financing provided by 6 equity investors and a large
consortium of 14 financial institutions (including 9 DFIs)
▪ Flagship transaction for the ongoing power sector reforms
▪ WBG’s multiple key roles: WB PRG covers for lenders, IFC
arranger & provider of senior and subordinated debt, MIGA PRI
for lenders and investors….in addition to pioneering balanced,
bankable contracts and engaging in continuous sector
dialogue.
WBG Instruments
▪ IBRD: providing two separate PRGs, a direct debt cover for
commercial lenders of $117 million, and a Liquidity PRG
backing the Power Purchase Agreement payments from the
national offtaker, NBET
▪ IFC: co-MLA for DFI senior debt tranche, mobilizing $177.5
million of senior and $35 million subordinated debt financing. In
addition, IFC is providing $50 million of senior and $30 million
of subordinated debt for its own account.
▪ MIGA: providing PRI both for equity, and $117 million of
commercial bank funded senior debt
A landmark project for Nigeria
A pathfinder for the IPP market in Nigeria: the first IPP
emerging from Nigeria’s power sector reform effort to
reach financial closure.
Its expected low cost of generation: levelized cost of
$10.5c/kWh vs. $30-50c/kWh for self-generated
electricity
The replicability of its structure – template PPA / PCOA
agreements established.
INVESTMENTS ALONG THE ENERGY VALUE CHAIN
(NIGERIA)
Inaugural address of President Bahara confirmed priority of energy sector and commitment to
comprehensive reform across the value chain:
▪ Institutional Reform – unbundling of utilities, stronger independent regulator, gas aggregation
company, central buyer (Nigerian Bulk Electricity Trading PLC, NBET)
▪ Cost-Reflective Tariff Regime – Multi Year Tariff Order (MYTO)
▪ Asset Privatization – 5 generation companies (GENCOs) and 10 distribution companies (DISCOs)
have been privatized
▪ Generation - target installed capacity of 40,000 MW by 2020 (against ~3500MW available today),
including pipeline of Independent Power Projects (IPPs)
▪ Transmission Company of Nigeria (TCN) under Management Contract
▪ Privatized DISCOS to catalyze investments to achieve rapid turn-around of dilapidated infrastructure
and improved service delivery
▪ World Bank Group and other IFIs/donors are backstopping reform and investments
US$74 billion of investment required
Distribution
16B
Transmission
9B
Generation
50B
Investment opportunities
Gas Supply
Unblocking Gas Supply
• NIPP plant gas supply
• Gas pipeline/CPF investment
Generation
Increasing Power Generation
• Gas to Power IPPs
• Solar IPPs
Transmission
Increasing Wheeling Capacity
• Transmission PPP type
investments
Distribution
and Access
Distribution Investments and
Access
• Distribution sector long-term capex
investment for expansion
• Access investments – small and
medium enterprises
BANDA GAS TO POWER IN MAURITANIA (WITH EXPORTS TO SENEGAL AND MALI)
Overview
▪ Gas field could produce up to 60 mmscfd
▪ Expected commissioning early 2019
▪ Bidding process for selection of private gas developer to be launched
early 2016
▪ Estimated US$ 1 billion for upstream and downstream projects combined
▪ 300 MW of gas fired capacity to serve power in Mauritania, Senegal and
Mali of which 180MW already in place
▪ Structured as a PPP with governments of Mauritania, Senegal and Mali as
shareholders
▪ WBG is providing transaction support, financing and guarantees
Benefits to Governments and Utilities
▪ Increase access to sustainable and reliable energy
▪ Cost reduction of supply by reduced reliance on
expensive liquid fuel for power generation
▪ Certainty: project will provide utilities with power at
fixed tariffs over a 20 year period
▪ Increase visibility of Mauritania as destination for
private investment
SOUAPITI HYDROPOWER DEVELOPMENT (GUINEA)
Overview
• Two phase development:
• First phase - 400 MW capacity (241 km2 reservoir, 15,000 people to be resettled, estimated cost US
$1.1 Billion)
• Souapiti will also regulate the Konkoure River, thus increasing firm capacity of the 240 MW Kaleta
dam
• Offtakers include: i) Guinean national utility EDG, ii) mining companies and iii) exports to neighboring
countries (OMVG and CLSG)
• IDA is financing the feasibility study to help structure the project as a PPP while AfDB is financing
environmental and social studies
• Bidding process for selection of private developer to be launched by end of 2015
Benefits to Governments and Utilities
• Increase access to energy services (currently estimated at 12%);
• Enable mining projects: Competitive energy provided by Souapiti will enable mining
projects, such as Simandou iron ore project, to materialize resulting in job creation,
increased exports and enhanced government revenues;
• Create revenues through power export and reduce cost of supply in neighboring
countries, substituting to expensive fuel oil;
• Regulate Konkoure River flows: The project will increase firm capacity of the 240 MW
Kaleta dam and facilitate further hydropower development in Guinea;
Projected Timeline
KENIE HYDROPOWER PROJECT
(MALI)
Overview
• Estimated installed capacity: 42 MW
• Estimated cost: US$165 M
• Structuring: PPP with IDA guarantees and IFC Financing
• Located on the Niger River, 35 km downstream of Bamako
• Run-of-the-river dam: 1km long dam with a max height of 8 m, with 3x14MW units
• Generate nearly 200 GWh/year with a peak load of 34.4MW
Benefits to Governments and Utilities
• Increase access to energy services (currently estimated at 30%);
Current Status and Next Steps
• Reduce reliance on expensive diesel generation and required government subsidies;
• The Concession Agreement between Eranove
• Provide energy to small businesses resulting in job creation, increased exports and enhanced
government revenues;
and Government of Mali was signed on June 18,
2015.
• Reach Financial Closure by June 2016
• COD by 2020
SCALING SOLAR (SENEGAL)
Overview
• Estimated capacity: 50- 100 MW
• Estimated cost: US$ 100-250 M
• Structuring: PPP project
• WBG – in cooperation with other donors – is supporting the Government of Senegal in the
competitive selection of a private developer.
• WBG will provide stapled financing and guarantees for selected developer to ease financial
close.
• Standardized and bankable documents along with transparent award process will facilitate faster
financial close and provide a level playing field for lowest cost development.
Benefits to Governments and Utilities
• Speed: standardized processes and documents enable rapid tendering and financial close
without the delays typically associated with project development and contract negotiations
• Certainty: balanced, bankable documents that can be offered on a non-negotiable basis with the
comfort of pre-approved, financing attached to the tender and available to all bidders
• Competitive fixed-rate tariffs: tenders designed to attract competition amongst top tier industry
investors, reduced transaction costs, and competitive financing terms to drive down tariff bidding.
Current Status and Next Steps
• Launch request for proposals by the end of
December 2015 for financial close in mid-2016.